1. CFPB is developing new disclosures that they are proposing to be used on the packaging of prepaid cards in place of disclosures that present different information, potentially making it difficult to do side-by-side comparisons and determine fee information.
The bureau has created two model labels that it has been testing on participants. The bureau is expecting to propose a rule on the topic later this spring. If your institution provides prepaid cards or is considering doing so, let us look at your operation to ensure compliance in all segments of this product offering.
2. Amazon.com has revolutionized everything from publishing to online shopping, and bankers are wondering if the “Amazon model” can save retail banking. This giant of the Internet was the guest of honor at the March 2014 American Banker conference.
On stage and in interviews, top bank executives repeatedly invoked Amazon’s name as an example of what they aspire to become, since Amazon focuses on the use of data and the customer experience. “Banks have not grown up that way,” Catherine Bessant, the global head of technology and operations for Bank of America (BAC), said in an interview, calling the e-commerce company “the most visible example of using data to customize a customer experience.” Although banks are slowly improving the technology they offer, they are still challenged with how best to use the slew of data they have on their customers.
However, banks need to be careful jumping into any new service or product, especially when using the information it has on its customers to solicit new business. Banks are adjusting to these challenges by rethinking business strategies, launching new products, overhauling their technology while increasing their coordination with third-party vendors, handling only the most core parts of business while outsourcing many other aspects that require specific expertise.
Let our former Federal bank examiners review any current processes you may have in place or provide guidance on any new endeavors your institution may be entertaining, especially in the area of using what may be deemed sensitive customer information.
3. CFPB recently announced that it has seen a significant increase in consumer complaints, stating that it has received more than 176,000 consumer complaints between July 2011 and June 2013 with more than two-thirds of the complaints received centered on mortgage lending (48%) and credit reporting (21%).
However, the CFPB recently reported that debt collection is now its largest source of complaints per month. The CFPB reported that of the more than 30,000 complaints it has received about debt collection, over one-third said the debt is not owed, with most of those reporting that the debt was never theirs to begin with. Almost a quarter of complaints are about debt collection tactics, and 14% said the collector threatened illegal action.
The same report also covered the bureau’s recent regulatory activity on debt collection, including an advance notice of proposed rule-making in November 2013 and two enforcement actions last year. Mortgage lending, credit reporting, and debt collection are three critical areas of consumer compliance a bank must stay on top of.
Our experienced, former, bank regulators can assist you in reviewing your policies and procedures to ensure that all regulatory requirements are being met in these activities.
